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Friday, 5 August 2011

S AFRICA ‘DON'T SUBSIDISE DESPOTS’

New Age, South Africa

5 August 2011

SOURCE

Editorial: Should we help despots?

The New Age Editorial

The government’s R2.4bn bailout of Swaziland is one of those classical conundrums in politics – damned if you do, damned if you don’t.

In announcing the bailout, Finance Minister Pravin Gordhan stressed it was meant to ensure Swaziland improved its governance and moved towards democracy, and that it would not benefit the kingdom’s despotic ruler, King Mswati III. The rescue package is said to be a loan from the South African Reserve Bank to the Swaziland Reserve Bank, implying that it is not a government-to-government agreement. That is cold comfort, given the hold that Mswati has on all institutions in his country.

Not surprisingly, the announcement came under immediate fire from across the political spectrum in both South Africa and Swaziland. The main criticism is that the bailout is likely to strengthen the position of Mswati and weaken pro-democracy forces.

This is not without merit and, if one considers the conditions spelled out by Gordhan, it was taken into account. The question is whether it will be enforced should Mswati renege.

In fairness to the government, these matters are never as easy as they might seem. South Africa is the leading nation in the region and has an obligation to respond in pragmatic ways to potential contagion crises. The collapse of Swaziland would be minuscule in global terms. Certainly, compared to the goings-on in Europe and the United States. But here, on our doorstep, it would have huge ramifications, not only for us, but for the region as a whole. The same goes for a collapse of Zimbabwe, next in the queue for an even bigger bailout.

As the events in Europe and the US demonstrate, the solutions are not straightforward and leaders struggle to make sound and lasting remedial decisions. However, SA resources shouldn’t, in any way, subsidise any despotic rule.

See also

S AFRICA SETS OUT LOAN CONDITIONS

http://swazimedia.blogspot.com/2011/08/s-africa-sets-out-loan-conditions.html

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